Question

Suppose you are trying to decide whether to park illegally while you attend class. If you get a ticket, the fine is $ 25. If you assess the probability of getting a ticket to be 1/100, what is the expected value for the fine you will have to pay? Under those circumstances, explain whether you would be willing to take the risk and why. (There is no correct answer to the last part of the question; it is designed to test your reasoning.)